Happy New Year! 2015 is here, and while most of the country is gripped by an evil wind chill, we still, regardless, must turn our attention back to alcohol beverage sales and look ahead, plan forward, and create a business model that will carry us this current year.
For most of my retail clients 2014 ended flat to moderately up. I work with a large chain in Southern Florida, and their results seem to be symbolic of three tier system beverage players through America. We are happy to have made it out alive! That sentiment seems to echo the majority of suppliers, retailers, brands, and distributors alike.
Let’s close the book on 2014, gladly, and look to 2015 and see what Rosen Retail thinks will be the 5 major trends in the adult beverage industry for the year.
- The Continued Death of the Independent. The independent alcohol beverage retailer is in trouble. The proliferation of the big box, chain, and grocery seller is more evident than ever in retailing history. As the big boys gain strength the little players are thrust into an area that is not sustainable. Price becomes the battleground, and that is just not a fight the small guy can have. It will be the job of the independent to sell their stores to the customer on other virtues than price. Using service, selection, and knowledge as weapons in the battle. Always remember that Costco only sells 200 SKU’s
- At last count (today) there were over 10 apps that sell real time alcohol delivery via smartphone. Let’s first ask ourselves, who needs real time delivery and then let’s ask what is the revenue stream for the app and is that able to be maintained? We predict that there will be a consolidation of the apps, and that there will need to be a clear and defined revenue stream for them. Having met with the top three at Rosen Retail, we can tell you that the App is a shell business for data mining and advertising, and that is a hard business indeed to maintain.
- The National Three Tier system will be fighting harder than ever in 2015 to maintain share. The Internet is making the bypass of the model easier than ever. Websites like Beverage Trade Network make it easy for more suppliers and distributors to find delivery channels that are not limited to the companies with the biggest wallet, but rather companies with the biggest desire to have and sell goods. This year there will be more merging and blurring of the lines that separate supplier from distributor to end user.
- In an earlier article last year I commented that DTC is not the golden bullet that everyone thinks that it is. There was a lot of flak sent my way on that comment; mostly from people that stand to benefit from the success of DTC. I still stand behind that. But, DTC will have a homerun year because of all the comments I made in Point 3. More wine, more Internet, more desire, more pressure downward on price, and more available customers. DTC, while not a needle mover in the overall wine selling market, will see double-digit growth using its 2014 sales as a benchmark and baseline.
- I know, I predict, and I can affirm that there will be a new online player in the wine online business. A global player that can make the biggest current player look like pets.com. More to follow on this but you can take this to the bank.
Those are my 5 predictions for the alcohol beverage world in 2015. Hang on because it will be a wild ride. Please look to Rosen Retail as your man on the inside for all things alcohol. We are front and center on all five of these initiatives.